Specialist bank Investec Australia has reduced the interest rates on its tailored home loan offering for financial advisers.

Advisers will now be able to access home loan packages from as low as 4.54% p.a. for two-year fixed rates* (4.79% p.a. comparison rate**), and 4.79% for variable rate loans* (4.84% p.a. comparison rate**).

The new interest rate offer follows an announcement by the bank late last year that it would actively target its existing network of independent financial adviser firms as well as the broader adviser services market, offering bespoke personal banking solutions including LMI-free mortgage options, commercial property lending for SMSFs, and vehicle finance.

Investec Australia’s Head of Adviser Services, Gareth Bird, said the rates reduction reflected the bank’s continuing commitment to provide advisers with flexible, responsive banking offerings designed exclusively for this market.

“Our position as a specialist lender allows us to partner with advisers in a way that very few others in the market are able to. We’re pleased to be able to add preferential home loan rates to that offering, and extend even further the range of tailored products we provide to professional IFAs,” he said.

The reduced rates available to IFAs also present an attractive offering given market conjecture that official Reserve Bank interest rates are unlikely to move lower than their current level. The RBA has held rates at 2.5% since August 2013, and economists are predicting a rise in the medium term, creating an opportunity for advisers to lock in a great value deal.

“As experts in this space we have been able to tailor a home loan offer specifically for advisers”, he said.

Mr Bird said the adviser services team would continue to innovate when it came to offering competitive banking solutions for advisers.

“Over the past six years we have worked closely with the client’s of advisers, and are now in the process of broadening our offering to include personalised lending designed for the advisers themselves,” he said.

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IRESS has continued to develop XPLAN into a world class financial planning application.

XPLAN has achieved the highest benchmark score for any financial planning application in the seven years of the Investment Trends Planning Software Report.

XPLAN was top rated, followed by Coin and AdviserNETgain.

The top rated Hybrid planning/platform integrated planning application was AdviserNETgain/Asgard.

FOFA development has been completed with a new development focus on engagement.

FOFA development has been completed with a range of enhancements to client service package management which give planners the ability to individually manage service package elements and control the level of reporting detail in client Fee Disclosure Statements.

The completion of FOFA development marks the end of several years of software development focussed on practice operations.

“Vendors have moved on from FOFA to refresh application interfaces, mobile functionality development and client engagement,” said Investment Trends Analyst Ian Webster. “Vendors are trying to improve planning efficiency by connecting planners and clients to practice workflow wherever they are.”

Vendors have moved to ensure their online applications are supported on tablets with IRESS and recently Coin releasing tablet apps with planner and client access.

IFAs, institutions and superannuation funds are using technology to deliver a range of scaled advice services.

The introduction of scaled advice has prompted the development of several new online planning applications and services as well as planning practices starting to use technology like video, social media and self-directed advice to develop new client relationships.

“Scaled advice may be an enduring legacy of the FOFA reforms,” said Ian Webster. “After several years focused on developing planning operations functionality for comprehensive planning, vendors are turning their attention to a broader range of advice delivery services.”

Provisio was surveyed as the best superannuation scaled advice application.

Projection based engagement has been a feature of superannuation fund websites for many years. In recent years financial calculators have been replaced by projection based self-directed advice recommendation services and call centre based scaled advice applications for superannuation advice provision.

“Provisio has been part of the development of superannuation advice technology for many years and has been joined by several other applications offering different approaches to scaled superannuation advice delivery,” said Ian Webster. “Rubik’s Proviso was surveyed as the best superannuation scaled application followed by Decimal and XPLAN Engage.”

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Launching the first product suite, BT Protection Plans, under the new brand BT Insurance, BT Financial Group’s head of life insurance Phil Hay said the three year project has created a service model that will clearly differentiate them from its competitors.

“The life insurance sector has a deep history, however what often comes with this legacy is entrenched processes and products that haven’t evolved over time,” Mr Hay said.

“We’ve developed an IFA life insurance solution that’s been specifically designed in partnership with advisers and includes market leading capability in each stage of the life insurance process.

“We’ve taken a clean sheet of paper and delivered an end-to-end solution that takes the best parts of product, technology and service unlike other offers that retro-fit or consolidate legacy systems.

“This ranges from on-the-spot decisions about client application with no signatures required; real time 24/7 access to your client’s information; an in-house Chief Medical Officer; flexibility for insurance inside and outside superannuation; a “tele-claims” service that facilitates a claims assessment over the phone without forms and signatures as well as fee for service flexibility including an option for unbundled commission.”

Mr Hay said they were confident the high service offer would lead the market and attract significant adviser demand.

“BT Financial Group has been delivering to the IFA market for decades, developing a deep understanding of their needs along the way and in early conversations we’re seeing significant interest,” he said.

“We will marry BT’s 30-year history in servicing the IFA market with Westpac Life Insurance Services Ltd’s 30-year experience as an underlying insurer.

“Importantly, BT understands advisers and we have the best insurance people in the market to deliver on this promise.

“This is a logical next step in BT’s innovation agenda that includes market changing developments such as the industry’s first wrap platform, BT Wrap, and Australia’s first super fund that puts your super alongside your internet banking, BT Super for Life.”

BACKGROUNDER – ‘BT PROTECTION PLANS’

Cutting edge technology

• LifeCENTRAL, a fully integrated online portal that provides real time 24/7 access to advisers to information on their clients applications and inforce data
• LifeCENTRAL+, a fast quote and application tool that provides on-the-spot decisions about client application with no signatures required
• LifeSAVER+, a leading point of sale tool that includes life-stage marketing and a chance of claim and needs analysis tool helping a advisers position insurance with their clients
• Market leading fee for service option for advisers, ahead of any legislative requirements, including an option for unbundled commission

Service and support

• Market leading claims process including first-to-market “tele-claims” initiative that allows a claims assessment to be conducted over the phone, without forms and signatures. Since launching tele-claims in March 2010 BT have seen almost 25% of all income protection claim notifications paid without the requirement of claim forms
• Best practice rehabilitation process including assistance and access to a range of rehabilitation services — at absolutely no additional cost. Rehabilitation Specialists work closely with both our clients and their medical practitioner to develop and implement rehabilitation tools to help them on their road to recovery and offers physical, vocational and psychological rehabilitation services
• A customer-centred claims philosophy that paid more than $100 million in claims to more than 1,000 customers in 2010 including:
  • Around $62 million in claim to help families cope with the loss of a loved one
  • $30 million to help our policyholders manage through sickness and injuries
  • Regular payments totalling more than $10 million paid to our income protection customers.

Affordable, tailored and flexible product suite

• Top quartile insurance features combined with product flexibility including inside and outside of super
• Guaranteed Upgrades for the latest product definition and features for 100% of policyholders. Adviser support throughout the entire process – state-based BDMs and underwriting; specialist hands-on Chief Medical Officer and technical support; market leading contact centre
• Premium discounts that recognise the value of clients such as multi-policy discounts
• Fully integrated into the BT Wrap platform as well as available as a stand-alone
• BT Life Insurance is underwritten by Westpac Life Insurance Services Limited which has a “AA” insurer financial strength and counterparty credit ratings from Standard & Poor’s.

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Independent service provider Paragem today announced its Dealer Services and Wholesale AFSL businesses have recorded strong growth as demand from financial planners for genuine conflict-free dealer services accelerates to meet the surging consumer demand for independent advice.

Paragem Dealer Services virtual IFA network exceeds 200 licences

Paragem Dealer Services has announced a record increase of new clients in 2010 with over 200 AFSLs now operating within the groups shared service model.

Paragem Dealer Services is a virtual network of over 1,000 independently minded advisers and is the largest independent provider of dealer services to the IFA market. Paragem provides a broad range of back office dealer services to retail advice businesses to enable them to access scale benefits in professional areas such as compliance, software planning support, professional indemnity (Pl) insurance, professional development (PD) days and product research. Over 90% of the client base is boutique style planning practices with typically more than $50 million under advice per AFSL. The remaining 20% is mid tiered dealer networks looking to outsource selected dealer functions.

ACT’s leading planning practice Aset Wealth Management is the latest to join the network and has come from BT’s inhouse Licensee Select. Aset looks after over $350 million in funds under advice has 11 staff and uses Paragem for all back office service including strategy support on industry matters affecting planning businesses.

As the Future of Financial Advice (FoFA) reforms are implemented, Paragem managing director Ian Knox said learning how to operate profitably and independently from product manufacturers was one of a number of key challenges ahead for many IFAs and that Paragem is committed to supporting this cause through its professional services support

“IFAs will always stand up for the value of their advice, their business and their clients – this leaves them well positioned to champion non conflicted advice.” He pointed out that the market was transitioning quickly to a new paradigm such that while many advisers are still grappling with how to gain a share of the product margin, product manufacturers and private equity firms are reversing this and are now seeking to gain a share of the advice margin by investing in advice businesses. This positions IFAs really well as volume bonuses are eroded and advice fees increase he said.

“In our opinion the FoFA outcome will provide added stimulus for advisers to become independent – either by being self-licenced or under a conflict free licensing arrangement. We’ve been operating on this basis since Paragem was established in 2005 and are the only group able to support and champion advisers under either model,” he said.

Paragem Wholesale AFSL grows to $1.2 billion in FUA

Reflecting the growing desire among financial planners to provide conflict free advice, Paragem’s Wholesale AFSL service has grown from three to 13 practices over the last 18 months, delivering an increase in funds under advice (FUA) to $1.2 billion.

The service selectively wholesales its non-aligned AFSL to successful, independently minded practices which are striving for excellence in advice. Advisers have the freedom to run their own business, promote their brand and select the best platform and products for their clients’ needs in contrast to being part of an aligned dealership seeking to develop a large distribution network to promote funds into a given platform. Full licensing support and governance is part of the service benefit.

The Paragem Wholesale AFSL proposition has attracted the attention of some of the best practice heads in the country who are looking for leadership and support to build consumer confidence in planning. The most recent example joining the Wholesale AFSL is a collective group of four practices known as the FMD Group, formerly one of AMP Hillross’s largest and most successful practices with over $700million under advice.

FMD Group practice head Greg Fagan, said: “We looked for a strong governance based licensing arrangement that gave us full flexibility in the platform support we require, access to changing market developments such as IMA’s and access to a product suite unhindered by ownership politics. The wholesale licence provides this under Paragems custody and enables us to focus on offering the best advice to our clients and growing our practices profitably.”

Mr Knox said the changing regulatory landscape had contributed to the growing demand from practices wanting to join Paragem Wholesale AFSL and that the licence would continue to focus on high quality practices with cultural compatibility and like minded integrity.

“As FoFA unfolds we expect interest in our Wholesale AFSL business to grow as quality planning practices recognise the importance of removing perceived or real conflicts of interest with product promoters,” he said.

Despite the rise in expressions of interest for the AFSL, Mr Knox said Paragem has continued to screen practices for firms that demonstrate putting client interests first and that the licence had no intention on focussing on increased adviser numbers for the sake of size.

“There’s no correlation between good advice and large numbers of authorised representatives and yet the industry boasts about headcount as if to demonstrate success.

“Our strong compliance culture enables careful due diligence when we meet new practices and we take months to engage properly, this includes examining file histories and new practices being screened by other practices within the model. I don’t know how a dealer group can grow by hundreds and claim quality screening and quality assessment” he said. “Yet one bad apple contaminates a brand.”

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